Tamares (Vincent Square) Ltd. v Fairpoint Properties (Vincent Square) Ltd

Damages in lieu of an injunction for infringement of a right to light are assessed by reference to the greater of loss of amenity and the value of losing the ability to prevent the infringement. The latter requires a hypothetical negotiation at the date of breach. Where likely development profit is evidenced, the award will normally reflect a fair percentage of that profit, while taking account of the nature and seriousness of the infringement. The sum must not be so high that the development would probably have been abandoned. The court must also stand back and decide whether the resulting bargain feels fair in context.

In an earlier liability judgment, the court found that Tamares (Vincent Square) Ltd had suffered infringement of a right to light affecting two windows serving stairs to the basement of its building. The court declined to grant an injunction and reserved the assessment of damages in lieu.

The parties disputed the appropriate measure and quantum of damages. The court considered whether compensation should reflect only the small loss of amenity, an uplift from that sum, or a percentage of the profit attributable to the development. It assessed the value of the lost ability to prevent the infringement.

1. Measure of damages. The court held that the recoverable sum was the greater of damages for loss of amenity and damages compensating for loss of the ability to obtain an injunction. The amenity figures were necessarily lower and did not determine the award.
2. Hypothetical negotiation. The value of the lost right to prevent the infringement was assessed by asking what reasonable commercial parties would have agreed in a hypothetical negotiation, normally at the date of breach. The negotiation had to reflect the context and seriousness of the infringement, the claimant’s bargaining position, the likely profit from the relevant development, and the risk that an excessive payment would deter the development.
3. Where likely profit is evidenced, the court should normally award a fair percentage of that profit. Where it is not evidenced, a suitable multiple of loss of amenity may be used. The percentage is not determined automatically by the developer’s profit margin. The limited nature of the infringement remains relevant, even where the parties would principally negotiate over a share of profit.
4. The court accepted the rival expert profit estimates and took their midpoint of £174,500. A prima facie one-third share produced £58,166, but the relatively modest infringement and the need not to make the development uneconomic justified reduction to £50,000. The court concluded that this figure represented a fair result and that a higher figure would not feel right.